Online Gamers Want…Higher Price Points?

By Neil Mcintosh

Facebook/Bloomberg

A screenshot of the popular Facebook game “FarmVille.”

Social gaming is huge — it’s been claimed that half of Facebook users play social games, which means at least 250 million people are enjoying them. It’s not surprising that it’s a hot area for start-ups and acquisitions at the moment, as businesses look to develop and profit from the immersive power of games where users compete against friends and family.

But there was an interesting, maybe cautionary comment on stage here at LeWeb in Paris, where Sebastien de Halleux, the co-founder of Playfish (a social games maker), was being interviewed by Tekzilla host Veronica Belmont.

Asked what users were asking for, he said: “Higher price points.” It sounds unlikely, but Mr. de Halleux provided more detail; that gamers, instead of wanting to spend a few cents here, a few more here, wanted to pay more up front so they could avoid making so many transactions. His company was, he said, being asked to introduce a $100 price points for games — a price that provoked surprise even from this tech-savvy audience.

It didn’t sound like good news for those who still think micropayments are the way to pay for content — from gaming to news — in the future.

There were also arched eyebrows when he insisted that a user, who currently pays around $60 for a game they’re immersed in for three months, gets great value now — and might be willing to spend $1,000 or more if they were paying in installments.

He didn’t say over what timescale they’d hand over that kind of cash, but it was certainly bullish talk. Little wonder so many players are piling into the sector.

Tech Europe’s team will bring you the best of LeWeb during the week, including exclusive interviews, video and live-blogging with the leading global innovators, investors and tech leaders. Follow all our coverage on the Tech Europe blog and by ‘liking’ our Facebook page.

Comments (1 of 1)

This is not surprising consudering that the gamers de Halleaux is likely referring to are loyal consumers of the games that they are being asked to make multiple tranactions for. For that user behavior subscriptions or lump sums are more in-line with how they consume.

Consider, however, the casual player who may not play the game with as much involvement as these gamers. Micropayments are more in-line with their consumption. Multiple revenue structures are needed to accomodate the various patterns of consumption. Otherwise, content providers are creating consumer surplus - leaving money on the table.

The same is true for news content. As Pew Research Center studies have pointed out, we consume news from a variety of sources. A consumer may read the Wall Street Journal religiously and, therefore, a subscription model makes sense. If that same consumer is referred to an article in the Atlanta Journal Constitution that is particularly relevant that day, it is more reasonable to ask that reader to pay per item for that one time transaction than to pay a subscription when he/she will likely not read the AJC enough to justify it.

The moral of the story is that content providers must present multiple payment options for multiple types of consumers. Mr. de Halleaux is likely spot on for the consumer type he refers to, but that does not mean micropayments are not user-friendly.

Jameson Hayes
University of Georgia/ Lede LLC
Twitter: ledellc

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